While that's by far the biggest raise by a US eSports related startup - yes, it's not primarily an eSports only platform but it's integral to the scene - the pre-money valuation is north of a whopping $700M.

Here's what's even crazier: by my estimates, Discord probably made less than $1M in revenue last year. No advertising. Some merch.Again, that's less than $1M in revenue and valued at almost a billion dollars.

As I speak to both investors and startups, it's befuddling to me how much both sides minimize monetization early in the strategic planning or product roadmap:

Me: How are you going to make money?

Startup: We'll figure out once we get scale.

Me: How are they going to make money?

Investor: They'll figure it out once they get to scale.

In the casino game - sorry venture capital - that is startup investing, it's the standard playbook of grab market share/eyeballs and then figure out how to monetize later like Facebook did. Further, Discord checks the boxes on key areas that VC's look for: Team (solid), previous experience (CEO sold OpenFeint for $100M+), and huge return (exit opportunity).

How big is Discord? They currently have 45M registered users quadrupling from a year ago.

So why is Discord valued so much and how could they actually make money?

Let's look at a few different possibilities:

01/GAMEBRIDGE

Gamebridge Integration In Lawbreakers (Photo: Discord:)

Gamebridge is DIscord's 1-stop solution for integrating a multitude of features into a game that developers don't have to worry about:

Voice and text chat for teams/friends

Auto generate game replay's, highlights and even GIF's

In a brilliant move, this automatically generates an individual discord server as well

The Gamebridge technology will be integrated into Boss Key/Nexon's upcoming title Lawbreakers, led by Gears of Wars creator Cliffy B.

Revenue Potential: SaaS for Developers

02/STREAMKIT

Discord's Streamkit Platform (Photo: Discord)

Streamkit is Discord's next product which again simplifies efforts for developers for multiple API integrations.

The reason I keep enforcing "make it easier for devs" is that unless you've worked at a gaming company, you don't realize the immense pressure game teams are under to deliver a continually changing product, on time, with little resources and time away from your family. #ShoutOutGameDevelopers 🙏🏽

Somewhat similar to Overwolf, this platform could be the outlet for the 3rd party money plug.

04/NITRO

Sound familiar? It's not far off from Twitch's streamer subscription benefits for users.

Revenue Potential: Monthly subscription revenue

05/ADVERTISING

Last and definitely not least, Advertising and Sponsorship. With the 3 things that Brands look for the most in their investment - scale, engagement, ROI - Discord could easily provide this.

Revenue Potential: Brands

Those are 5 different ways that Discord could monetize their platform going forward. They also do a fantastic job maintaining their "cool brand" within the community, via Hypesquad or their Partner program.